Council's In?house Bus Service Going From Strength to Strength

12th February 2026

Members of The Highland Council's Economy and Infrastructure Committee have welcomed a report outlining the strong progress, substantial cost avoidance and continued development of The Highland Council's in‑house bus service since its establishment in January 2023.

The report presented to the committee earlier today (Thursday 12 February) highlights major growth in the service, which has expanded from an initial fleet of 10 vehicles to 25 vehicles now delivering a mix of school transport contracts, public bus routes and low‑cost education hires for trips and activities.

Chair of the Committee, Councillor Ken Gowans praised the ongoing success of the in‑house model and the opportunities ahead for strengthening public transport provision across the region.

He said: "The in‑house bus service is delivering reliable transport for our communities while protecting the Council from escalating contract prices. The savings achieved so far are significant, and the continued growth demonstrates how important this service has become.

"A steady increase in passenger numbers tell a clear story. People are using and valuing the services we are providing. The in‑house team is helping residents access work, healthcare and education, and ensuring connectivity for communities who would otherwise be underserved."

A detailed breakdown within the report sets out the cost avoidance achieved since taking key contracts in‑house.

The combined previously tendered value of contracts now operated in‑house amounted to £4.19 million per year.
The current annual running cost for delivering these services internally is £2.4 million.
This demonstrates significant annual savings, while maintaining continuity of school and community services.

The in‑house team operates several public bus services throughout the Inverness area, with passenger numbers rising year on year:

73,727 passengers in 2023
85,465 passengers in 2024
135,839 passengers in 2025

The report highlights this growth as a reflection of the increasing reliance communities place on locally delivered, responsive and reliable services.

A 2024 Internal Audit recommended that a long‑term financial and business strategy be developed for the service. Work is underway to design the future operating structure for the Council's bus services, including examining the potential establishment of an Arm's-Length External Organisation (ALEO). Benchmarking is being carried out with similar organisations such as Lothian Buses.

A cross-service Officer Group has been established, and a report on the proposed operating model, and wider public transport opportunities across the Highlands—will be brought to the May 2026 Economy and Infrastructure Committee.

Councillor Ken Gowans added: "This is an important moment for transport in the Highlands. The in‑house service has proven its value, delivered savings and supported communities during a challenging time for the transport sector. The work now underway will help shape a sustainable model for the long term, ensuring we continue to deliver the best possible service for the Highlands."

The committee paper can be read at
https://shorturl.at/uXekL